Since the U.S. Supreme Court opened the door to lawyer advertising
in 1977 with its decision in Bates v. State Bar of Arizona, 433 US 350,
97 S Ct 1817, 53 L Ed2d 810 (1977), marketing has become a necessary element
of business plans for law firms big and small. With the advent of the internet,
it has also become common place for law firms big and small to market via the
web. The imperatives brought by the business environment and the marketing
efficiencies brought by the web have also combined to present new challenges
for law firm risk management. Although some remain tethered to traditional
regulatory concerns (in terms of bar discipline), several new ones focus instead
on the potential civil liability. We’ll look at three: one a new variant
of an old regulatory concern; one a new rule that has particular application
to law firm websites; and one a new application of what was always good advice.
With each, we’ll examine both the risks and strategies to reduce them.

New Variations on Regulatory Themes
Along with the right to market and the need to market, law firms today are
increasingly presented with the opportunity to market across state lines.
This ability weaves together two increasing trends, one regulatory and one
technological. On the regulatory side, lawyers today often practice in more
than one jurisdiction. Large firms and even many mid-size firms in the Northwest,
for example, often have offices in Oregon, Washington and beyond. With the
expansion of reciprocal admission over the last 10 years, it is also common
now for many small and sole practitioners to practice routinely in more than
one state. On the technological side, websites allow us to project ourselves
into more than one market with ease.

Because the law firm marketing regulations in all states have
been influenced heavily by the evolving First Amendment law coming from the
Supreme Court and the corresponding attempts to keep regulatory pace by the
American Bar Association through its Model Rules of Professional Conduct, there
is now a high degree of commonality in the law firm marketing rules across
the country. But, "commonality" does not equal "uniformity."1

To take three very common examples from here in the Northwest:

Oregon under its RPC 7.1(a)(4) allows lawyers to market themselves
as specialists (as long as that is true), but Washington under its RPC 7.4
generally does not.

Oregon under its RPC 7.2(c) allows lawyers to participate in "for
profit" lawyer referral services that are becoming increasingly common
on the internet, but Washington under its RPC 7.2(b)(2) does not (limiting
participation to non-profits).

Oregon under its RPC 1.5(d) allows a fee-split with a referring
lawyer without regard to the work the referring lawyer puts into the case,
but Washington under its RPC 1.5(e) limits fee split payments in this situation
to those in proportion to the services the referring lawyer provides on the
case or otherwise requires the referring lawyer to assume joint responsibility
for the case.

All of the states in the Northwest recently adopted similar choice-of-law
rules for assessing which state’s professional rules apply to multistate
conduct. Under the versions of RPC 8.5(b) in Oregon, Washington and Idaho,
the regulations that apply are either those applicable to the court involved
(if the matter is in litigation) or where the conduct or its predominant effect
occurred. The choice-of-law rules, however, envision more traditional "static" conduct
than the very fluid nature of law firm marketing across state lines. Moreover,
for both large firms with in-house marketing departments or small firms using
outside marketing consultants or web designers, lawyers should not expect that
their marketeering personnel are necessarily going to know the nuances of the
Rules of Professional Conduct for either advertising generally or the regulatory
choice-of-law rules. At the same time, the versions of RPC 5.3 in all three
Northwest states put the burden of knowing and applying the rules on the supervising
lawyers rather than directly on in-house or outside consultants.

Lawyers marketing across state lines need to be aware of the
marketing rules in each jurisdiction in which they practice. In some instances
involving marketing that flows uniformly across boundaries such as law firm
websites, they will need to apply a blanket rule based on the most restrictive
jurisdiction in which they practice. For example, lawyers who practice and
market in both Oregon and Washington should not refer to themselves on their
websites as "specialists" in violation of the Washington rule but,
rather, can describe themselves in both states as "experienced in" (or
the like) to achieve the same practical end. By contrast, where marketing activities
are targeted to a particular jurisdiction, then the law of that state should
apply. For example, if an Oregon-based lawyer licensed in Washington received
a referral from a Washington lawyer for a case to be litigated in a Washington
court, then Washington’s fee-split rule should apply under either state’s
version of the choice-of-law rule.

Recruiting Clients Via the Web
Among the new regulations with particular import to law firm marketing that
came to us when the Rules of Professional Conduct replaced the Disciplinary
Rules in 2005 was RPC 1.18 on duties owed to prospective clients. Although
the Oregon Supreme Court touched on these duties in In re Spencer,
335 Or 71, 58 P3d 228 (2002), RPC 1.18 outlines the duties very specifically:

(a) A person who discusses with a lawyer the possibility of forming
a client-lawyer relationship with respect to a matter is a prospective client.

(b) Even when no client-lawyer relationship ensues, a lawyer
who has had discussions with a prospective client shall not use or reveal information
learned in the consultation, except as Rule 1.9 would permit with respect to
information of a former client.

(c) A lawyer subject to paragraph (b) shall not represent a client
with interests materially adverse to those of a prospective client in the same
or a substantially related matter if the lawyer received information from the
prospective client that could be significantly harmful to that person in the
matter, except as provided in paragraph (d). If a lawyer is disqualified from
representation under this paragraph, no lawyer in a firm with which that lawyer
is associated may knowingly undertake or continue representation on such a
matter, except as provided in paragraph (d).

(d) Representation is permissible if both the affected client
and the prospective client have given informed consent, confirmed in writing,
or:

(1) the disqualified lawyer is timely screened from any participation
in the matter; and

(2) written notice is promptly given to the prospective client.

Although issues relating to prospective clients certainly arose
when telephones were the primary technological vehicle for first contact, "interactive" websites
that allow two-way communication between prospective clients and lawyers can
sharpen the risks significantly.

Simply listing a lawyer’s contact information on a law
firm website should neither create an attorney-client relationship nor trigger
the duties under RPC 1.18 if a person contacts a lawyer unilaterally through,
for example, an unsolicited e-mail. Oregon under In re Weidner, 310
Or 757, 801 P2d 828 (1990), requires "two way" communication as a
predicate to the former, and Comment 2 to ABA Model Rule 1.18, from which our
rule was drawn, makes the point on the later that "(a) person who communicates
information unilaterally to a lawyer, without any reasonable expectation that
the lawyer is willing to discuss the possibility of forming a client-lawyer
relationship, is not a "prospective client(.)"

Many law firm websites, however, allow prospective clients to
interact with the firm’s lawyers directly through two-way e-mail or through
questionnaires describing their legal problems. Without warnings to prospective
clients that such communications do not create an attorney-client relationship
and that they should not forward information they regard as confidential until
the firm can run a conflict check and determine that further communications
can take place, law firms at minimum risk unintentionally triggering duties
to prospective clients.

The practical importance of both kinds of disclaimers was illustrated
in Barton v. U.S. DistrictCourt for the Central District of California,
410 F3d 1104 (9th Cir 2005). In Barton, a plaintiffs’ personal
injury firm invited prospective clients to complete an online questionnaire
about a prescription drug involved in litigation the firm was handling. The
questionnaire included a disclaimer that no attorney-client relationship was
formed by completing the questionnaire but did not include a disclaimer on
confidentiality. The 9th Circuit held that absent a clear disclaimer, the firm
would still have a duty of confidentiality to those who submitted the questionnaires.
Although decided under California law, the rationale the 9th Circuit used in Barton was
very close to the duties now recognized under Oregon RPC 1.18.

Once created, the duties to prospective clients now recognized
by RPC 1.18 may disqualify firms from opposing those prospective clients in
the matters involved even if the prospective clients do not become firm clients.
Further, because the Oregon Supreme Court cast the duty of loyalty under the
conflict rules in fiduciary terms in Kidney Association of Oregon v. Ferguson,
315 Or 135, 843 P2d 442 (1992), violation of even the limited duty of loyalty
contained in RPC 1.18 raises at least the specter of potential breach of fiduciary
duty claims.

Old Medicine with New Relevance
Whether increased lawyer advertising helped create today’s competitive
business environment or is simply a reflection of that environment, marketing
has become a practical necessity for most lawyers in private practice today.
With that practical necessity can come the subtle pressure, at firms big and
small, to take on work that is at the conflict margins. The Oregon Supreme
Court reminded us recently in In re Knappenberger, 338 Or 341, 108 P2d
1161 (2005), that we need to have conflict systems and we need to use them.
That "old medicine" is perhaps even more relevant in today’s
kinetic business climate. The results of no or poorly run conflict checks (or
no waivers when there are conflicts that are otherwise waiveable) can range
from regulatory discipline to disqualification to claims for breach of fiduciary
duty.

Summing Up
Lawyers today spend much time, money and energy trying to create "good
news" in the form of positive marketing of themselves and their firms.
A little time also spent on the risk management side of law firm marketing
can reduce the chance that those efforts will create more "bad news" than "good."

Endnote

1. For a recent discussion of paying directory listing and
referral fees in the Internet context, see OSB Formal Ethics Op. 2007-180.

ABOUT THE AUTHORMark J. Fucile of Fucile & Reising handles professional responsibility, regulatory and attorney-client privilege matters and law firm related litigation for lawyers, law firms and legal departments throughout the Northwest. He is a past member of the OSBís Legal Ethics Committee, past chair of the Washington State Bar Rules of Professional Conduct Committee, member of the Idaho State Bar Professionalism & Ethics Section and co-editor of the OSBís Ethical Oregon Lawyer and the WSBAís Legal Ethics Deskbook. He can be reached at (503) 224-4895 or Mark@frllp.com.